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January 27, 2023

Friday Footnotes: PwC Runs to Supreme Court; Accounting Firm Hacked; CFO Accused of Fraud Shares His Story | 2.21.20

U.S. House Subcommittee Scrutinizes Accounting Rule Maker [Wall Street Journal] The new chairman of the House Committee on Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets is targeting U.S. accounting rules in a move to increase oversight of a U.S. accounting rule maker, despite a potential battle to enact legislation or alter its powers. “If you control the definition of earnings per share, you control the vast majority of the important entities in the country,” Rep. Brad Sherman (D., Calif.), who was elected in December to chair the subcommittee, said in an interview. “For FASB to exercise that much government power in what is a separate cloister is as far away from democracy as they can possibly get.”

PricewaterhouseCoopers to Take Pension Fight to Supreme Court [Bloomberg Law] PricewaterhouseCoopers LLP will ask the U.S. Supreme Court to review a Second Circuit decision reviving a class action by retirees seeking higher pension benefits, the company said Tuesday. PwC asked the Second Circuit to delay enforcement of its December 2019 decision so that the company can file a petition for review with the Supreme Court. The decision conflicts with Supreme Court precedent under the Employee Retirement Income Security Act and there is a “reasonable probability” that the justices will take the case, PwC said.

U.S. securities regulator warns over Chinese audit amid coronavirus outbreak [Reuters] The SEC said on Wednesday it had been pressing the Big Four accountancy firms, which audit roughly 140 U.S.-listed Chinese companies, to ensure they are scrutinizing how firms are managing and disclosing the risks. The regulator said it had also asked the firms to keep an eye on the impact of the virus on audit quality, since the coronavirus had caused personnel disruptions in mainland China and Hong Kong.

Hacking of Accounting Firm Affects Medical Group [Information Security Media Group] An apparent ransomware attack on an accounting firm in December exposed the patient data of Community Care Physicians, a large upstate New York medical group, as well as other clients of the firm. Some of the data that was breached as a result of the attack on Albany, New York-based BST & Co. CPAs LLC has shown up on the publicly accessible website of ransomware gang Maze, which purportedly names and shames victims into paying ransoms, says Brett Callow, a threat analyst with the security firm Emsisoft.

2020 Inductees to the Accounting Hall of Fame [American Accounting Association] Congrats to Victor Zinn Brink, Robert Mednick, Leslie Seidman, Shyam Sunder, and Doyle Zane Williams.

R.I. to keep $30 million of $50-million Deloitte settlement [Providence Journal] Rhode Island gets to keep $30 million of a $50-million payment that Deloitte Consulting, the architect of Rhode Island’s troubled UHIP computer system, agreed to pay a year ago in exchange for a contract extension.

The SEC Falsely Accused Me of Fraud [CFO] Gregory Law, former CFO of Osiris Therapeutics, wrote: “It should go without saying that CFOs should be ethical. 
Most of the ones I’ve met are. But if you’re a public company CFO, you should be aware that there are circumstances in which the enforcement division of the Securities and Exchange Commission may assume there’s a good chance you are not ethical. Even if you are. I spent almost four years dealing with the real-world consequences of that mindset. I recently emerged from that experience, which was frustratingly bizarre. My story should serve as a warning to all public company executives.”

Grant Thornton names David Platt to East region leadership role; expands regional role for Nichole Jordan [GT] Grant Thornton LLP has named David Platt as its regional managing partner for the firm’s East region. In the role, Platt will oversee a consolidated geographic area covering the firm’s East Coast operations. In addition, Grant Thornton has expanded Nichole Jordan’s role as its regional managing partner for the firm’s Central region – adding the Midwest geographic area to a portfolio that previously consisted of Kansas, Missouri, Nebraska, Oklahoma and Texas.

WeWork just announced a new COO in its first major hire under new CEO [Business Insider] Office-sharing startup WeWork on Thursday named Shyam Gidumal, a former Ernst & Young executive, as its new chief operating officer in the first major executive appointment under new CEO Sandeep Mathrani. Gidumal previously served as a partner and principal at EY, where he led the retail and consumer products market segment.

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